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Beware - credit card rip-off



 
 
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  #1  
Old April 19th, 2004, 08:29 PM
Andy Pandy
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Default Beware - credit card rip-off

There is a new "facility" you may encounter when paying by credit card in a
foreign currency. The POS terminal identifies which country your credit card is
from and conveniently converts the local currency into your home currency. Your
credit card is then billed in your home currency rather than the local currency.

Might sound helpful, but the catch is that the exchange rate at which the
conversion is done is almost certainly a lot worse than your bank would use if
you got billed in the local currency. The retailer usually gets a cut of the
exchange rate markup so it's in their interest to bill you in your home
currency.

They are supposed to ask you which currency you want to billed in, but it
practice it doesn't always happen, and the default is to bill you in your home
currency. But you are perfectly entitled to insist you are billed in the local
currency, after all the product or service will have been priced in the local
currency. Don't let retailers rip you off in this way!

--
Andy



  #2  
Old April 20th, 2004, 09:57 AM
Alec
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Default Beware - credit card rip-off


"Andy Pandy" wrote in
message ...
There is a new "facility" you may encounter when paying by credit card in

a
foreign currency. The POS terminal identifies which country your credit

card is
from and conveniently converts the local currency into your home currency.

Your
credit card is then billed in your home currency rather than the local

currency.

Might sound helpful, but the catch is that the exchange rate at which the
conversion is done is almost certainly a lot worse than your bank would

use if
you got billed in the local currency. The retailer usually gets a cut of

the
exchange rate markup so it's in their interest to bill you in your home
currency.

They are supposed to ask you which currency you want to billed in, but it
practice it doesn't always happen, and the default is to bill you in your

home
currency. But you are perfectly entitled to insist you are billed in the

local
currency, after all the product or service will have been priced in the

local
currency. Don't let retailers rip you off in this way!

It's called 'Dynamic Currency Conversion' in the trade-speak. It's touted
among retailers and service providers (hotels, car rental firms etc) doing a
lot of business with foreign visitors, and also on-line dealers. The card
processors entice them with 'customer satisfaction' and 'extra income
stream' (i.e. sharing exchange mark-up).
First developed by the Irish firm Forexco, it's now offered globally and
adopted by leading retailers like Harrods and international hotel groups. I
now make the point of insisting before my card is swiped that I want to be
charged in the local currency. Visa/Plus and Mastercard/Cirrus regulations
stipulate that customer must be given a choice. If they still put through
the transaction in the card's billing currency, refuse to sign the slip and
ask them to void it. If they still refuse, tell them you'll ask your card
issuer for a chargeback. Expect a dirty look or take your customs elsewhere.

Alec


  #3  
Old April 20th, 2004, 08:21 PM
Phil Richards
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Default Beware - credit card rip-off

On Mon, 19 Apr 2004 20:29:37 +0100 Andy Pandy
said...

They are supposed to ask you which currency you want to billed in, but it
practice it doesn't always happen, and the default is to bill you in your home
currency. But you are perfectly entitled to insist you are billed in the local
currency, after all the product or service will have been priced in the local
currency. Don't let retailers rip you off in this way!


Happened to me over the Easter weekend in Ireland. In fact I started a
thread off "Credit Cards in Rep. of Ireland" in this very ng a few days
later and no-one seemed to know anything about it!

In two cases I wasn't offered the option and lost about 3% as again I
wasn't aware of it. Although not huge amount I'm disputing the difference
through my credit card issuer. Next time I'll be more alert.

--
Phil Richards
London

  #4  
Old April 20th, 2004, 08:32 PM
Phil Richards
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Default Beware - credit card rip-off

On Tue, 20 Apr 2004 09:57:11 +0100 Alec
said...

If they still put through
the transaction in the card's billing currency, refuse to sign the slip and
ask them to void it.


Could prove difficult when paying for goods after you've used or consumed
them - e.g. restaurant or hotel bills. Petrol stations would have
difficulty in asking for your fuel if you didn't want to pay for it! For
shops you could just refuse to buy the goods and walk out which is where
I think the smart consumer will win over this practice.

If they still refuse, tell them you'll ask your card issuer for a
chargeback.


Which is what I've had to do and only for the difference which may not be
a huge amount, but it's the principle that counts. The card receipts are
the only proof of the price in local currency if my experience is
anything to go by. You'll need to keep them and supply copies as evidence
for any dispute. Difficult or impossible for phone or internet
transactions as a credit card receipt isn't always issued. The local
currency or rate of exchange for these DCC type transactions don't appear
on your statement either, just the rate in the currency of the card
issuer.

--
Phil Richards
London

  #5  
Old April 20th, 2004, 08:55 PM
Padraig Breathnach
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Default Beware - credit card rip-off

Phil Richards wrote:

On Tue, 20 Apr 2004 09:57:11 +0100 Alec
said...

If they still put through
the transaction in the card's billing currency, refuse to sign the slip and
ask them to void it.


Could prove difficult when paying for goods after you've used or consumed
them - e.g. restaurant or hotel bills. Petrol stations would have
difficulty in asking for your fuel if you didn't want to pay for it!

In such cases, I would see it differently: you have the whip hand. You
will almost certainly bought on the basis of a menu or price display
showing prices in the local currency from a trader who had also
displayed a sign showing willingness to accept your type of CC. The
reasonable inference is that the trader must accept settlement in the
local currency charged to your CC account. Anything else done without
your express agreement is taking an indefensible liberty. Offer to
walk, and see what happens.

--
PB
The return address has been MUNGED
  #6  
Old April 20th, 2004, 09:39 PM
Phil Richards
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Default Beware - credit card rip-off

On Tue, 20 Apr 2004 20:55:49 +0100 Padraig Breathnach
said...

In such cases, I would see it differently: you have the whip hand. You
will almost certainly bought on the basis of a menu or price display
showing prices in the local currency from a trader who had also
displayed a sign showing willingness to accept your type of CC. The
reasonable inference is that the trader must accept settlement in the
local currency charged to your CC account. Anything else done without
your express agreement is taking an indefensible liberty.


I wholeheartedly agree with you there. I'll be one step ahead next time
and before I hand my card over I'll be asking ask the retailer first. In
Ireland or the US for example no problem, however it could prove
different when there are language differences and I'm afraid to say that
is where the consumer is most likely to loose out. The phrase "they are
supposed to ask first" before taking the option to bill in local or
currency or whatever I take with some suspicion. This of course may or
may not be laid down in some terms & conditions between agreed the
retailer and their card handler.

Depending on the adverse publicity and negative reaction from consumers
coupled with an increase number of complaints and charge back disputes I
somehow can't see this practice lasting for very long. We'll see.

--
Phil Richards
London

  #7  
Old April 20th, 2004, 10:18 PM
Phil Richards
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Default Beware - credit card rip-off

On Wed, 21 Apr 2004 06:52:09 +1000 Dave Noble
said...

I think it will last. I expect that there are a lot of people who will
be happy to get a CC receipt in their own currency. They will know
exactly what they have spent rather than waiting to see what comes
through. I know that I would have been happy with this when buying
stuff from the UK recently


Providing you don't mind paying about another 3% for the privilege then
fine. Personally I find by doing a rough calculation based on the
exchange rate is enough to get by.

--
Phil Richards
London

  #8  
Old April 20th, 2004, 10:44 PM
Olivers
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Default Beware - credit card rip-off

Andy Pandy muttered....



Might sound helpful, but the catch is that the exchange rate at which
the conversion is done is almost certainly a lot worse than your bank
would use if you got billed in the local currency. The retailer
usually gets a cut of the exchange rate markup so it's in their
interest to bill you in your home currency.


Given the amounts involved in individual CC transactions, the exchange
rates which I have seen for about eleventy dozen times better than the
"cash" exchange rates provided by either the two banks I worked for and as
good as many of the commercial transcation rates available to traders and
large coorporations. CCs have litereally revolutionized foreign exchange,
with debit/ATM cards following to change even further the "Bad Old Days".

Outside the 3rd World and big chunks of the developed Middle East, I
suspect the day of the small currency exchanges and small money traders may
be almost gone.

TMO
  #9  
Old April 21st, 2004, 12:06 AM
Miguel Cruz
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Default Beware - credit card rip-off

Phil Richards wrote:
Alec said...
If they still put through the transaction in the card's billing currency,
refuse to sign the slip and ask them to void it.


Could prove difficult when paying for goods after you've used or consumed
them - e.g. restaurant or hotel bills.


Seems to me you consumed goods based on the price they represented, then
suddenly at payment time they decided they wanted to change the price. I'd
guess you'd be within your rights to stand firm on the price they initially
told you you'd have to pay, sans unwanted double-conversion markup.

miguel
--
Hit The Road! Photos and tales from around the world: http://travel.u.nu
  #10  
Old April 21st, 2004, 12:08 AM
Miguel Cruz
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Default Beware - credit card rip-off

Dave Noble wrote:
I think it will last. I expect that there are a lot of people who will
be happy to get a CC receipt in their own currency. They will know
exactly what they have spent rather than waiting to see what comes
through. I know that I would have been happy with this when buying
stuff from the UK recently


That's a pretty expensive information service.

I'll tell you what: For 2% of your purchases I will look up the exchange
rate and pass it on to you.

miguel
--
Hit The Road! Photos and tales from around the world: http://travel.u.nu
 




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